Consumer Concerns cause Consultation on Copycat Crackdown: a Parasitic Product Packaging Private Prosecution Power?

With apologies for using enough Cs and Ps to exhaust a jumbo bag of Scrabble tiles, this one is about lookalike products and the powers that brand owners have to address them. The UK government is considering bolstering those powers and is now calling for evidence on the proposal.

Unfair Consumer Practices – limits on enforcement

Photocopying is expensive largely due the costs associated
with removing the frequent jams caused by cats

When the UK government implemented the Unfair Consumer Practices Directive (the UCPD) in 2008 by way of the Consumer Protection from Unfair Trading Regulations 2008 (also known as the CPRs but not to be confused with the litigator’s beloved bible, the Civil Procedure Rules), it left enforcement of the CPRs to a series of “specified enforcers” which despite sounding like a piece of mafia nomenclature, generally means local authority Trading Standards officers or what is now the Competition and Markets Authority. The UK government declined to give rights owners a private, civil right to bring action for injunctive or other relief in the civil courts. With the resources of the specified enforcers being fairly limited (and in the age of austerity, even more limited), aggrieved parties had little option but to report the offending conduct and hope the enforcers did something about it. This may now change.

What are the CPRs?

The CPRs criminalise unfair commercial practices which are, amongst other things, misleading actions or omissions or “aggressive” actions. The CPRs include a blacklist of practices at Schedule 1, which features “Promoting a product similar to a product made by a particular manufacturer in such a manner as deliberately to mislead the consumer into believing that the product is made by that same manufacturer when it is not.” European Commission guidance on the UCPD raises in this context the problem of copycat packaging. The mischief is probably familiar to readers – creating a lookalike product which borrows the general “look and feel” of a market-leader so as to, one way or another, induce consumers to buy the copycat instead. Copycat products may confuse consumers, but they may also create an association without confusing and induce purchases by appropriating a degree of the goodwill or reputation of the copied product (the British Brands Group produced a presentation in 2012 with a great selection of examples of copycat products, you can find it here).

A crackdown on copycat products?

I see what you did there!

Having received “strong representations” from certain unspecified industry sectors, the Department for Business, Innovation and Skills (the BIS) has got wind that copycat products are a problem and that there is a gap in brand owners’ enforcement powers to deal with them. One such problem is, as noted above, that the businesses who suffer (along with consumers) from the effects of copycat products have no power of their own to intervene under the CPRs. The BIS has now launched a consultation calling for evidence on nine issues including:

1.    The nature and scale of any problems associated with the current enforcement arrangements.

The enforcers have indicated to the BIS that they do not see copycat packaging as a particular problem, and not one that deserves priority over detrimental practices. Are they right? (doubt it, growls Merpel).

2.    The extent of any consumer detriment arising from copycat packaging.

The BIS notes the UK Intellectual Property Office’s research report discussed here and asks for comment.

3.    The equivalent enforcement provisions existing in other Member States and how they have worked.

The BIS notes that Ireland already gives brand owners the right to apply for civil remedies for infringements of all of the UCPD. It would be interesting to know how many times that right has been exercised.

4.    The costs and benefits of giving businesses the right to take civil (injunctive) enforcement action against copycat packaging, including any effects on competition and innovation.

The BIS note that “There is a fine line between confusing packaging and using generic cues to provide useful signs to consumers” (nicely put, remarks Merpel).

5.    How the power would work and what impact might there be on the way in which enforcement of the CPRs operates in the UK.

6.    What legal changes might be needed to provide businesses with the right to take civil (injunctive) enforcement action against copycat packaging, including defining the practice covered by the private right of action in order to capture what is intended without providing too broad a power.

The consultation is restricted to considering the case for providing businesses with a power to take civil injunctive action against copycat packaging and does not address other aspects of enforcement of the CPRs including a wider enforcement power for businesses.

The consultation is open until 19 May 2014. The next stage will be “an interim report for further discussion with interested parties”.

Isn't this what IP rights are for?

Imitation is the sincerest form of flattery

Let’s not forget that the CPRs are just a fairly small part of the brand owner’s existing brand protection arsenal. Trade marks, passing-off, design rights and copyright can all be relied upon to stop misleading, confusing and other dubious commercial practices including counterfeiting.

Product packaging is often protected by a mix of trade marks, registered (or unregistered) designs and goodwill, with the final of these three having a good degree of in-built flexibility via the law of passing-off. That said, each has its limits. Lookalikes tend not to use the same brand name – they are not counterfeits. Instead they take elements of the get-up: shape, colour, juxtaposition of geometric design, and so on. Those may not always be protected by registered trade marks or designs. Passing-off succeeded in the famous Penguin vs Puffin litigation, but along with “traditional” trade mark infringement needs evidence that consumers will be mislead or confused. Many forms of lookalike packaging do not confuse, but still take sales away from the copied product by reason of their similarity. Trade mark law does, of course, protect against the taking of an unfair advantage, but only where the right marks are registered and they are sufficiently well known to enjoy a reputation.  

This Kat very much recognises the problem of lookalikes, and thinks that some culprits have been getting away with brand-murder for years. He also suspects that a lot of this is down to commercial decisions, rather than legal limitations, with brand owners acutely aware that many of the most prolific copycats are also their biggest customers. Wouldn’t a change in attitude on the brand owners’ part have a bigger impact than the proposed change in the law? Or will things only improve with both? As always, comments are welcomed.

Thanks to my colleague Jack Rutherford for drawing the consultation to my attention.